(RepublicanDaily.org) – Saying that it expects to record a net loss of around $680 million for the current fiscal year, pharmacy retailer Rite Aid has filed for Chapter 11 bankruptcy.
Rite Aid said that business will continue as usual, and customers will still be able to fill out their prescriptions and shop for healthcare products and other supplies at its stores and online while the company itself voluntarily undergoes the Chapter 11 proceedings. The bankruptcy filing and the resulting restructuring will ostensibly allow the pharmacy to streamline its operations for the meantime by closing underperforming stores and reduce its current debt.
The company also announced that it has managed to secure a $3.45 billion financing commitment from lenders. The financing will allow Rite Aid to “provide sufficient liquidity” throughout the bankruptcy process.
Heading the company as its new CEO will be Jeffrey Stein, who will also serve as Rite Aid’s Chief Restructuring Officer (CRO), as well as member of its board of directors. Stein takes over from Elizabeth Burr, who has held the interim CEO post since the beginning of the year. Burr will move to take a seat at Rite Aid’s board.
In a statement, Stein said that he was confident that Rite Aid will still be able to “reach its full potential as a modern neighborhood pharmacy,” given the “turnaround strategy that has been developed in recent months.”
Also related to the Chapter 11, the company appointed Carrie Teffner and Paul Keglevic to its board of directors. Rite Aid says that Teffner and Keglevic are both have extensive experience and expertise in leading companies through transformational and large-scale corporate programs, as well as in creating operational efficiency.
Rite Aid’s declaration of bankruptcy follows not only years of falling sales, but also the multiple lawsuits it has been facing, many related to the opioid crisis. In many cases the company has opted to settle – one such case was against the state of West Virginia that saw the pharmacy retailer fork out as much as $30 million in settlement payouts. Rivals CVS and Walgreens have also been hit with similar lawsuits.
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